Internet User Base – India growing the fastest but China has significant lead

Internet penetration is one of the major drivers of growth. It has been established now by various researchers that broadband penetration has a more profound effect on economic growth than even the mobile phones.

The global growth in internet usage is close to 8% and most of this growth is driven by emerging markets like India, Vietnam, Africa. The global internet user base is now 1.5 billion.

ComScore is a leading organization that tracks the internet usage across the globe. The chart below from ComScore shows that India is one of the fasted growing internet markets (Only Vietnam @101% growth & Venezula @61% growth are higher than India but in the chart I have ignored them due to lower base). The number of internet users in India are 60 million but since ComScore does not take corporate and cyber cafe usage into account, I would estimate the actual usage to be higher by 30%.

Given the growth and the increasing large base, I am very optimistic for internet based services for India. Apart from eCommerce, I expect services like e-Governance, digital money to prosper in India. Similar predictions can be made about Russia and Italy which are growing very fast as well. The problem with Italy is the broadband speed which is much below the global average.

China is the biggest internet market in the world and no wonder, it has emerged as one of the largest eCommerce market as well ( Taobao has gross revenues of over $30 billion). US which at one point of time had a dominant position in the internet industry is no longer the force it used to be. I would not be surprised if new online business models start to emerge from the countries like China, India and Russia.

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Disclaimer: The views expressed in this article are my personal views and do not reflect the views of my employer.

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About The Author

Mohit

Mohit is a telecom professional with rich experience over 15 years. His expertise is in the area of strategy and planning and his work experience includes stints with two of Big 5 consulting organizations, a telecom operator and a handset vendor. Mohit can be reached at mohit@telecomcircle.com

Chinese BtB eCommerce site Alibaba has made a concerted effort to recruit business partners and developers in the USA and Europe. The outreach event in Seattle in January presented web and software developers and entrepreneurs an opportunity to learn more about the Alibaba cloud services and eCommerce development platform and connect with company officials.

I think the reaching outside of China shows an orientation towards business that will lead to greater influence. China has clout due to the large export economy that provides a flow of goods that can be sold increasingly through online sales directly to consumers and businesses in other countries. This outstrips the corresponding flow that might be achieved in the other direction that might be harnessed by eBay or other online service. Similarly, although India has a large and rapidly growing customer base inside the country, the flow of goods, except for information services, is dwarfed by that of China.

Where India may be able to tip the scales is innovation of social and eCommerce services. Thus far, I am not aware that this trend is in the offing. The US had a time to development and market lead on other countries. And many of the Chinese services are not so much known for their uniqueness as for their size based on where they are located.

Perhaps a discernable trend, although not well quantified, is the willingness of Chinese eCommerce business to partner and create associate sales programs. This has helped some new businesses, such as Fastcardtech.com to grow sales of popular mobile phones, largely Schenzen clones, at a rapid pace. That has led to early availability and exclusive export supply of some models.

International bridges to cross are online payment systems, and distribution center infrastructure.